Baidu Expose Suggests That It's A Lot More Involved In Music Downloads Than It Lets On

from the not-so-much-of-an-innocent-bystander dept

More than three years ago, when Chinese search engine Baidu first filed to go public, we noted that it's huge advantage over Google in China appeared to stem from its very popular music download search engine -- and we wondered if going public would force that to go away, potentially damaging the company's bottom line significantly. In fact, we were surprised that it appeared that the investors in the site hadn't done much due diligence to understand what was going on. The recording industry wasted little time in suing Baidu. While Baidu won the first case on a technicality and quickly sued again.

At first, this did seem like a typical situation seen with other online search engines, such as The Pirate Bay or even Google, where it's not really clear how Baidu could stop the searches for unauthorized music. However, a new investigative report by The Register found evidence that suggests Baidu is actually a lot more involved in the music download business than it lets on. Specifically, the search results mostly link to a mysterious network of sites that are only reachable via Baidu searches. You can't just go to the sites directly. The sites themselves have a long (and potentially growing) list of random domain names such that the songs constantly move around, and any time Baidu receives a "takedown" it can claim it complied, while the music almost immediately shows back up on the next domain in the list. Also, Baidu almost never links to other, legitimate, download sites -- preferring to point people to these sites that are unreachable outside of Baidu instead.

All in all, it certainly sounds like Baidu is a lot more involved in providing the actual downloads than it would as just a search engine.

That said, The Register's report includes a variety of unsupported statements about how this has "destroyed" economic activity in the music business. As we've seen, the music business has actually adapted to the expectation that the music itself is free in China. I recognize that it's popular for the RIAA and IFPI to make claims about how downloading is destroying the music industry, but you would think that the Register would know better.

You should proof read before posting

Re: You should proof read before posting

The headline should be "than" NOT "then"

Fixed. Thanks for pointing it out.

By the way, we do proofread. Plus, we have a staff that reviews the posts. But everyone makes mistakes, so sometimes those things slip through. We appreciate when people politely let us know, and then we fix them. So thank you for alerting us.

Re: Registertards

Just a quick note. Baidu advantage (over Google China) goes far beyond simply the fact that pirated music is available on its network. Baidu results are much accurate from the Chinese user standpoint. I believe that Baidu biggest drawback (and potential risk in the future) is the fact that they list advertisers within the organic results, and the more they have advertisers sign up to their PPC services, the more the best results will be pushed down the SERPs.

Eastern Paradise?

I wish you would stop using China as an example of the music industry successfully adapting to free music. As someone who works in the Chinese music industry I suggest you come over here and see exactly what ubiquitously free MP3s do to a fledgling music environment.

The resulting landscape is one where only a tiny elite group of artists can actually make money. When the only real income from your masters is Ringtone revenue, and the only ringtones people want are the popular hits, all the focus is on the homogenous blob of 100 or so pop songs that reside at the top of the pirate MP3 charts at any one time.

The other source of revenue is brand sponsorship. In a relatively un-nuanced marketing environment like China, brands only want to associate with the highest profile artists, thereby doubly vexing anyone who doesn't make it to the top of these charts.

With all of the riches being contained in these top strata, the focus of music creativity is to make suitably anodyne, lowest-common-denominator pop fare, not to push the musical boundaries forward. Anything that misses this mark is relegated to anonymity and, in most cases, a day-job.

There is a lot of great stuff happening in China, but on the whole it should absolutely NOT be used as an example of free music HELPING music creators. The Register has it right. If you value musical diversity and creativity, up and down the long tail, then you would re-evaluate your position on someone like Baidu giving so much music away with no returns to the copyright owners.

I understand it is fashionable (and usually correct) to take an opposite opinion to the RIAA/IFPI but I wish you wouldn't do it so blindly. In this case you even go so far as to attack The Register for using "unsupported statements" by counterpointing with unsupported statements of your own. Please look into this subject a bit more before writing about it again.

Re: Eastern Paradise?

I couldn't agree more. Even though I am not a musician in China, I am a Sound / Recording Engineer, and it is very sad to see how musicians are being treated as slaves by the general population.
Mike, I do agree that, yes, piracy does have it's ways of helping to get the music out there, and I do agree that the typical CD based business model that the Majors/RIAA/MPAA/APRA are trying to cling to is completely outdated. And I would also agree that $20-$30 AU dollars is too much to pay for an album. And I certainly agree that in some cases a band giving away SOME of their music will help to sell (and add value to) their other offerings.
BUT, in the end the musicians need to make a living from their job (which is exactly what it is). What the hell is the point of a musician writing, producing and recording music if a percentage of the population is willing to throw it straight back in their faces by not paying for it.
We need a better system, one where the Majors can f**k off and go bankrupt, where the musicians ARE able to make a living (no, I don't mean become millionaires), and where the customers / general population is not being over-charged for the end product.
To all of you out there who still pay for your tunes, I thank you, it is people like you who are allowing people like myself to do what they are good at, and make a living from it.
If you want a laugh feel free to check out (and download) one of my latest collaborations at: http://www.mp3.com.au/Forms/ArtistProfile.aspx?ProfileId=267617
Cheers, NASA
PS: Mike, thanks for some awesome opinions and perspectives.

Re: Re: Eastern Paradise?

Re: Re: Eastern Paradise?

BUT, in the end the musicians need to make a living from their job (which is exactly what it is).

So, this statement confuses me. The whole point of the models we discuss is to show musicians ways to make MORE money out of their job. Why would you assume otherwise? Why would we pitch a model that would make them less money?

What the hell is the point of a musician writing, producing and recording music if a percentage of the population is willing to throw it straight back in their faces by not paying for it.

Again, the point is to get people to pay -- but to pay for scarcities. Infinite goods will always get pressured to be priced at zero. It's just basic economics.

Re: Re: Re: Eastern Paradise?

Mike:
Maybe I didn't make my point correctly, I agree with most of the models that you have proposed in the couple of years I have been frequenting this site, I am not disagreeing with what you propose.
I am however disagreeing with a decent percentage of people who have a habit of putting comments on this site to the effect of "screw the RIAA/MPAA/Majors, I'm just gonna pirate music to get back at them". I wholeheartedly agree with the "screw the RIAA/MPAA/Majors" part, that is completely fair enough, but at the end of the day, as stated previously, the musicians that are actually creating the music still need to eat. I was just kind of hoping that the people I speak of actually read the comment, and maybe thought about it a little (not that it would make a huge difference, but hey, it's my two cents). At the end of the day piracy is just not the moral thing to do.
Mike, you are completely correct that infinite goods need be used to help sell the scarce goods, it is the only way it will ever effectively work, and it's very true that you could never put a large value on something that can be duplicated with a couple of mouse clicks, it's not just basic economics, it's common sense :)

Re: Re: Re: Re: Eastern Paradise?

I am however disagreeing with a decent percentage of people who have a habit of putting comments on this site to the effect of "screw the RIAA/MPAA/Majors, I'm just gonna pirate music to get back at them"

Re: Re: Re: Re: Re: Eastern Paradise?

I understand you never said that China was a paradise but your persistent suggestion that China's industry is some sort of success story grates slightly:

"In China, where "piracy" is rampant, the music industry is thriving" (You - Oct 22nd 2007)

Clumsy use of the term by me though, granted.

The focus of my comment was actually on how 100% piracy effects the conditions for creativity, not so much the business side. The West has developed myriad genres catering to every musical taste under the yolk of IP protection. Without this historically ingrained passion for diversity, in the context of an IP free-for-all, China's musical output is totally one-dimensional and will remain so as long as outfits like Baidu refuse to share their enormous spoils off the back of music. Creators of long tail music in China are totally neglected in the value chain, resulting in a pop 'echo-chamber' where only lowest common denominator music is rewarded to the cost of everything else. This lack of money in the long tail and resulting homogenization of music is the direct result of free MP3s. In this respect 'free' is certainly nothing to be admiring.

To come back to my original objection, the landscape resulting from Baidu's music search and charting system is entirely undesirable and therefore The Register is totally justified in its attack. No need to paint it with the RIAA/IFPI brush. Having read your comebacks in these comments I see that we essentially agree on most points. I think we just differ on our understanding of the benevolence of Baidu.

Saying all this, once you accept that music IS free in China, it makes for some genuinely exciting challenges from a business perspective: New models and so forth. From the artists point of view, these new models couldn't come too soon.

Re: Eastern Paradise?

First off, I've never said that it's a "paradise." I merely pointed out that there is evidence that the industry has been adopting and figuring out new models. That doesn't mean it's complete, but it does suggest that the "destruction" of the industry is unlikely.

I think that the Chinese music industry could probably go much *further* in embracing free music business models. From what I've seen (and, yes, I have been speaking to folks involved in the industry) the real problem is that the embrace of free music models hasn't been strong enough -- with too many hoping that the gov't will come and protect them, or relying solely on ringtone revenue, rather than implementing more complete business plans involving scarcities.

More than three years ago, when Chinese search engine Baidu first filed to go public, we noted that it's huge advantage over Google in China

This whole thing looks like the Chinese way of doing business... both the courts and the site know that they're just buggering about being "legal", but that their actions are not. Whatever can be proved.

Comments

Lawrence - so what? I judge writers on the quality of their stories, and how responsive they are to email. Andrew's stories are interesting even when I don't agree with them, and he has always been very open to suggestions, corrections and advice.

Without original journalism the web would just be one big comment forum. Maybe that's what you value, but I don't.

Now you mention it - perhaps that's why Andrew's stories are consistently interesting - he doesn't waste time with people like Lawrence D'Oliveiro.